4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – down.
The moving average (20; smoothed) – down.
CCI: -110.1798
On Monday, May 20, the British pound continues its non-stop downward movement against the US dollar. As we have repeatedly noted, the current type of depreciation is the most dangerous possibility for the pound, as there are no rollbacks and corrections (the Heiken Ashi indicator eloquently shows this), and even the foundation cannot save the pound from new falls. In general, this situation is called "waited". Traders have been waiting for a long time and did not sell the pound in the hope that the UK parties will be able to at least agree among themselves so that in the future the country could finally accept the option of an agreement on Brexit. However, Labor and the Conservatives did not agree. Theresa May reported recently in the Times column that she is preparing a "new and bold proposal" to the British Parliament. We immediately have a lot of questions, for example, what new proposal are we talking about, if there were no additional negotiations with the European Union? It seems that several minor additions will be made to the current version of the agreement, and in total it will be called "new agreement". And the Parliament will gladly reject the "deal" on Brexit for the fourth time and can do it at least until October 31. And on October 31, Britain and the EU can postpone Brexit to an even later date.
Nearest support levels:
S1 – 1.2695
S2 – 1.2634
S3 – 1.2573
Nearest resistance levels:
R1 – 1.2756
R2 – 1.2817
R3 – 1.2878
Trading recommendations:
The pair GBP/USD continues its downward movement. Thus, short positions with targets at 1.2695 and 1.2634 are now relevant, before Heiken Ashi's indicator turns to the top, which will indicate a turn of an upward correction.
Buy-positions are recommended to be considered only after fixing the pair above the moving average with the first targets at 1.3000 and 1.3062. However, at the moment, the bulls are extremely weak and they are unlikely to have enough strength in the near future to overcome the MA.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of illustrations:
The upper linear regression channel – the blue line of the unidirectional movement.
The lower linear regression channel – the purple line of the unidirectional movement.
CCI – the blue line in the indicator regression window.
The moving average (20; smoothed) is the blue line on the price chart.
Murray levels – multi-colored horizontal stripes.
Heiken Ashi is an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company - www.instaforex.com